SOL Tops $200 as Google Search Data Shows Peak Retail Interest
Solana’s SOL went above $200 on Thursday, the fourth straight day the smart contract blockchain’s token reached a record high.
The cryptocurrency has chalked up a five-fold rally in the past 30 days, courtesy of renewed interest in Ethereum alternatives amid the explosive growth of non-fungible tokens (NFTs). Money has been flowing into Solana and other Ethereum alternatives capable of handling a much larger volume of transactions for lower fees compared to Ethereum, the world’s largest smart contract blockchain.
SOL’s rally, however, may cool as web search figures show the peak popularity of the token in the general populace. That’s often observed at major price tops.
Google Trends, a widely used tool to gauge general or retail interest in trending topics, is currently returning a value of 100 for the worldwide search query “how to buy solana” over the past 12 months. The worldwide search query for the term “Solana” is also returning a value of 100 at press time.
A score of 100 represents peak popularity – the maximum number of searches observed for a term during a given time frame. It means more and more people are scanning the web for information on how to buy SOL, which has outperformed market leaders bitcoin and ether by leaps and bounds in recent weeks.
Google Trends provides access to a mostly unfiltered sample of actual search requests made to Google and scales their searches on a range of 0 to 100, according to the company. The search value represents the search interest relative to the highest point on the chart for the selected region and time.
General interest began rising with Solana’s launch of the NFT project Degenerate Apes on Aug. 15. The token also began its near-vertical rise around the same time.
Peak popular interest does not necessarily imply an increase in actual buying pressure from retailers. Often, investors search for information but don’t act. That said, a value of 100 for the search query “how to buy solana” does show retailers are eager to step in (or some may have already bought).
Retail investors have a reputation for being the last entrants in a bull run, and their entry often coincides with the exit of large investors and major market tops. Bitcoin’s 2017 bull run peaked with google search value for the term bitcoin rising to 100 in December. Similar web search values were observed in January and April this year, signaling a retail frenzy. Bitcoin peaked above $64,000 in April.
Peak general interest in SOL is accompanied by an above-70 or overbought reading on the relative strength index, a widely tracked technical analysis. The above-70 reading indicates the rally is overdone, and the asset could see some consolidation or correction.
SOL’s social volume, or the number of mentions of the coin on crypto social media channels, including Telegram groups, and crypto subreddits tracked by analytics firm Santiment, reached a record high of 8,802 this week before decoupling from the rising price on Wednesday. High levels of crowd chatter often work as a contrary indicator.
“The August rally in non-fungible tokens and the pickup in decentralized finance activity have helped not only ethereum but also alternative cryptocurrencies that facilitate or plan to facilitate smart contracts, such as Solana, Binance Coin and Cardano,” JPMorgan said. “The previous phase of retail investors’ mania into cryptocurrency markets was between the beginning of January and mid-May… and retail investors are making cryptocurrency markets look frothy again.”
Most NFTs on Solana, including the Degenerate Ape Academy, have seen a drop in volumes in the past 24 hours, according to Solanalysis.com. While collectibles on Solana have generated $95 million worth of trading volume over the past seven days, the week-on-week growth rate is pretty flat.
The broader NFT boom is also showing signs of cooling. OpenSea, the world’s largest NFT marketplace, registered a trading volume of less than $100 million on Wednesday, the lowest since Aug. 21, per Dune Analytics. Other popular NFTs like Loot and CryptoPunk have also seen a sharp drop in trading volumes in the past 24 hours.
All things considered, SOL’s bullish momentum may slow and the cryptocurrency could see a price pullback.